Economy
Nigerian Economy to Grow 2.6% in 2021, 2.7% in 2022 – IMF
By Adedapo Adesanya
The Nigerian economy is expected to grow by 2.6 per cent in 2021, the latest International Monetary Fund (IMF) on Thursday said.
The country’s gross domestic product is expected to achieve progress thanks to high oil prices, even if production will remain below pre-COVID levels, it added.
Meanwhile, the Bretton Wood institution then predicted a 2.7 per cent growth in Africa’s most populous country in 2022.
For the continent, the lender forecast that Africa’s economic rebound from pandemic-induced shrinkage would be weaker than in the rest of the world in 2021 and 2022.
Low rates of vaccination against COVID-19 across the continent top the list of reasons for the slower recovery, the Washington-based institution said in a biannual report on the region.
Growth for sub-Saharan Africa should reach 3.7 per cent in 2021 and 3.8 per cent in 2022, a welcome but relatively modest recovery, the IMF said in its forecast.
Those figures would nevertheless be “the slowest in the world given that the developed economies will grow by more than five per cent and the emerging or developing countries by more than six per cent,” it added.
With just 2.5 per cent of people vaccinated against COVID-19, lockdowns have been the sole option for containing the virus,” said IMF.
Even though 12 billion doses of vaccine are to be produced in 2021, it will likely take more than a year for a significant number of Africans to be vaccinated, the Fund added.
Although Africa has been the region of the world least affected by the pandemic, it has also experienced several successive waves of the coronavirus, and the lender pointed out that there is little reason to believe that there won’t be repeated waves going forward.
The Fund blamed “stockpiling by advanced economies, export restrictions by major vaccine manufacturing countries, and demands for booster shots in advanced economies” for shortages in Africa that could continue for the foreseeable future.
It added that “international cooperation on vaccination is critical to address the threat of repeated waves.
“This would help prevent the divergent recovery paths of sub-Saharan Africa and the rest of the world from hardening and becoming permanent fault lines, which would jeopardize decades of hard-won social and economic progress.”
In South Africa, growth should reach five per cent this year, better than expected, but return to a more modest level (+ 2.2 per cent) next year for want of structural reforms, according to the IMF.
In Angola, another economy that relies heavily on oil, the IMF forecasts a 0.7 per cent GDP contraction in 2021, before the growth of 2.7 per cent in 2022, ending six consecutive years of recession.
In tourism-dependent countries such as Cape Verde, Mauritius, The Gambia or Seychelles, growth has returned to pre-COVID levels but the losses sustained in 2020 will be difficult to erase.
Meanwhile, the most fragile economies include Sahel nations facing jihadist insurgency or political tensions, like Chad and Guinea.
The security situation there could shake the expected rebound in consumption and investor confidence, the IMF warned.
By Adedapo Adesanya
President Bola Tinubu on Friday presented a budget proposal of N58.47 trillion for the 2026 fiscal year titled Budget of Consolidation, Renewed Resilience and Shared Prosperity to a joint session of the National Assembly, with capital recurrent (non‑debt) expenditure standing at 15.25 trillion, and the capital expenditure at N26.08 trillion, while the crude oil benchmark was pegged at $64.85 per barrel.
Business Post reports that the Brent crude grade currently trades around $60 per barrel. It is also expected to trade at that level or lower next year over worries about oil glut.
At the budget presentation today, Mr Tinubu said the expected total revenue for the year is N34.33 trillion, and the proposal is anchored on a crude oil production of 1.84 million barrels per day, and an exchange rate of N1,400 to the US Dollar.
In terms of sectoral allocation, defence and security took the lion’s share with N5.41 trillion, followed by infrastructure at N3.56 trillion, education received N3.52 trillion, while health received N2.48 trillion.
Addressing the lawmakers, the President described the budget proposal as not “just accounting lines”.
“They are a statement of national priorities,” the president told the gathering. “We remain firmly committed to fiscal sustainability, debt transparency, and value‑for‑money spending.”
The presentation came at a time of heightened insecurity in parts of the country, with mass abductions and other crimes making headlines.
Outlining his government’s plan to address the challenge, President Tinubu reminded the gathering that security “remains the foundation of development”.
He said some of the measures in place to tame insecurity include the modernisation of the Armed Forces, intelligence‑driven policing and joint operations, border security, and technology‑enabled surveillance and community‑based peacebuilding and conflict prevention.
“We will invest in security with clear accountability for outcomes—because security spending must deliver security results,” the president said.
“To secure our country, our priority will remain on increasing the fighting capability of our armed forces and other security agencies by boosting personnel and procuring cutting-edge platforms and other hardware,” he added.
By Aduragbemi Omiyale
The deadline for the recapitalisation of the Nigerian pension industry has been extended by six months to June 2027 from December 2026.
This extension was approved by the National Pension Commission (PenCom), the agency, which regulates the sector in the country.
Addressing newsmen on Thursday in Lagos, the Director-General of PenCom, Ms Omolola Oloworaran, explained that the shift in deadline was to give operators more time to boost the capital base, dismissing speculations that the exercise had been suspended.
“The recapitalisation has not been suspended. We have communicated the requirements to the Pension Fund Administrators (PFAs), and we expect every operator to be compliant by June 2027. Anyone who is not compliant by then will lose their licence,” Ms Oloworaran told journalists.
She added that, “From a regulatory standpoint, our major challenge is ensuring compliance. We are working with ICPC, labour and the TUC to ensure employers remit pension contributions for their employees.”
The DG noted that engagements with industry operators indicated broad acceptance of the policy, with many PFAs already taking steps to raise additional capital or explore mergers and acquisitions.
“You may see some mergers and acquisitions in the industry, but what is clear is that the recapitalisation exercise is on track and the industry agrees with us,” she stated.
PenCom wants the PFAs to increase their capital base and has created three categories, with the first consists operators with Assets Under Management of N500 billion and above. They are expected to have a minimum capital of N20 billion and one per cent of AUM above N500 billion.
The second category has PFAs with AUM below N500 billion, which must have at least N20 billion as capital base.
The last segment comprises special-purpose PFAs such as NPF Pensions Limited, whose minimum capital was pegged at N30 billion, and the Nigerian University Pension Management Company Limited, whose minimum capital was fixed at N20 billion.
By Adedapo Adesanya
Three securities weakened the NASD Over-the-Counter (OTC) Securities Exchange by 0.68 per cent on Thursday, December 18.
According to data, Central Securities Clearing System (CSCS) Plc led the losers’ group after it slipped by N2.87 to N36.78 per share from N39.65 per share, Golden Capital Plc depreciated by 77 Kobo to end at N6.98 per unit versus the previous day’s N7.77 per unit, and FrieslandCampina Wamco Nigeria Plc dropped 19 Kobo to sell at N60.00 per share versus Wednesday’s closing price of N60.19 per share.
At the close of business, the market capitalisation lost N16.81 billion to finish at N2.147 billion compared with the preceding session’s N2.164 trillion, and the NASD Unlisted Security Index (NSI) declined by 24.76 points to 3,589.88 points from 3,614.64 points.
Yesterday, the volume of securities bought and sold increased by 49.3 per cent to 30.5 million units from 20.4 million units, the value of securities surged by 211.8 per cent to N225.1 million from N72.2 million, and the number of deals jumped by 33.3 per cent to 28 deals from 21 deals.
Infrastructure Credit Guarantee Company (InfraCredit) Plc remained the most traded stock by value with a year-to-date sale of 5.8 billion units valued at N16.4 billion, followed by Okitipupa Plc with 178.9 million units transacted for N9.5 billion, and MRS Oil Plc with 36.1 million units worth N4.9 billion.
Similarly, InfraCredit Plc ended as the most traded stock by volume on a year-to-date basis with 5.8 billion units traded for N16.4 billion, trailed by Industrial and General Insurance (IGI) Plc with 1.2 billion units sold for N420.7 million, and Impresit Bakolori Plc with 536.9 million units exchanged for N524.9 million.
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